GRAND RAPIDS, Mich. — President-elect Donald Trump is following through on campaign promises to increase tariffs.
He announced plans on Monday to increase them by 25% on products imported from Mexico and Canada.
This could increase the cost of everything from produce, to gas, to cars.
While the day-one promise by Trump inches closer, some in the auto industry believe they could be using the threat of Tariffs as a negotiating tool.
That said, if they are actually enacted, the impact would be significant, according to Wall.
Wall said the auto industry and the three countries are all interconnected, with parts and products coming back and forth across the border four or five times before the product is finished.
That means manufacturers would pay the tax multiple times. However, there could be a silver lining. Some manufacturers could decide to relocate some of their work back to the United States.
"That's a possibility, certainly, and that's another maybe, would be viewed as a positive byproduct," said Wall. "The challenge there is that takes a little longer. I mean, there's technically, and typically, a longer runway to that. So the immediacy of a tariff clamps down right away. The changes that it might affect can take a little little longer to materialize."
As for auto parts manufacturers in West Michigan, Wall said the industry will most definitely feel the effect as will consumers, as the price of parts used to repair their car will also increase.
In response to the taxes, Mexico is threatening to impose a 10 percent tax of its own on American goods coming into Mexico.
Canada's prime minister, meantime, is taking a more subdued approach, saying he will work with the Trump administration to find a solution.
